Macquarie Group, which is Australia’s biggest investment bank, has filed a lawsuit against Jupiter Market & Trading. According to Reuters, Macquarie has accused Jupiter of breach of contract related to oil purchases and storage.
Jupiter wants to build a pipeline and a crude terminal
Jupiter is one of the companies that hopes to build a crude export terminal along the Gulf Coast. Their plans include a terminal in Brownsville, Texas with 10 million barrels of storage capacity and the ability to receive a Very Large Crude Carrier. A Very Large Crude Carrier is an oil tanker that can transport extremely large quantities of oil across bodies of water.
The company also plans to build a 680-mile pipeline that runs from West Texas to the Gulf Coast and could potentially transport 1 million gallons of oil a day. They claimed to have secured funding for the pipeline.
Jupiter was behind on payments at a storage facility
One of the agreements Macquarie had with Jupiter was to store crude oil at a Jupiter space at a NuStar Energy Facility. However, in December, NuStar contacted Macquarie to inform the company that Jupiter was behind on payments at the storage facility. Macquarie had also sold Jupiter a large quantity of oil.
In January, the investment bank informed Jupiter that it would terminate its agreements. Macquarie requested payment for the oil and a termination fee.
Macquarie seeking $17.5 million
After not receiving payment, Macquarie opted to file a lawsuit claiming Jupiter breached its contracts for oil storage and purchases. The investment bank is seeking $17.5 million for fees and outstanding payments.
To prove a breach of contract case, you must first demonstrate a valid contract exists. A valid contract needs four elements:
- An offer is when there is an intention to enter a contract.
- Consideration is when both parties agree to give and receive something that is valuable.
- Acceptance is when both parties agree to the contract’s terms. This is often done by signing legal documents.
- Mutuality is when both parties understand and agree to all the terms of the contract.
After showing a contract is valid, you must demonstrate you held up your side of the contract, or essentially, that you performed the duties as described in the contract. Then you must prove the other party did not perform their contractual duties.
Even if a contract was breached, if it was minor, you may not have a legal case. The breach must be material, which means it defeats the purpose of the contract. Refusing payment is considered a material breach, but being late with a payment is not generally considered a material breach. When a material breach occurs, the other party is no longer obligated to continuing performing contractual duties.
Anyone who has suffered a material breach of contract may also seek damages from the other party.